55536 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(3). 

5The rules proposed in this filing will be 

renumbered as appropriate following Commission 

approval of the pending revisions to the NASD 

Code of Arbitration Procedure for Customer 

Disputes; see Securities Exchange Act Release No. 

51856 (June 15, 2005), 70 FR 36442 (June 23, 2005) 

(SR–NASD–2003–158); and the NASD Code of 

Arbitration Procedure for Industry Disputes; see 

Securities Exchange Act Release No. 51857 (June 

15, 2005), 70 FR 36430 (June 23, 2005) (SR–NASD–

2004–011). 

6 Digital recording is the recording and storing of 

audio data through use of one of several computer 

file formats, such as MP3, AVI, WAV, etc., rather 

than using tape. These files can be stored 

electronically, and sent via e-mail. 

7 15 U.S.C. 78o–3(b)(6). 

8 15 U.S.C. 78s(b)(3)(a)(iii). 

9 17 CFR 240.19b–4(f)(3). 

10See section 19(b)(3)(C) of the Act, 15 U.S.C. 

78s(b)(3)(C). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–54455; File No. SR–NASD–

2006–102] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Allow for the Digital 

Recording of Arbitration Hearings 

September 15, 2006. 

Pursuant to section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on August 

23, 2006, the National Association of 

Securities Dealers, Inc. (‘‘NASD’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by NASD. NASD 

has designated this proposal as 

concerned solely with the 

administration of a self-regulatory 

organization pursuant to section 

19(b)(3)(A)(iii) of the Act 3 and Rule 

19b–4(f)(3) thereunder,4 which renders 

the proposed rule change effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NASD is proposing to amend Rule 

10326 of the NASD Code of Arbitration 

Procedure (‘‘Code’’) to allow for the 

digital or other recording of arbitration 

hearings. 

Below is the text of the proposed rule 

change.5 Proposed new language is in 

italics. 

* * * * * 

10326. Record of Proceedings 

(a) A verbatim record by stenographic 

reporter or a tape, digital, or other 

recording of all arbitration hearings 

shall be kept. If a party or parties to a 

dispute elect to have the record 

transcribed, the cost of such 

transcription shall be borne by the party 

or parties making the request unless the 

arbitrators direct otherwise. The 

arbitrators may also direct that the 

record be transcribed. If the record is 

transcribed at the request of any party, 

a copy shall be provided to the 

arbitrators. 

(b) No change 

* * * * * 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NASD included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. NASD has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend Rule 10326 of the 

Code to allow for the digital or other 

recording of arbitration hearings. 

Rule 10326 of the Code currently 

requires arbitration hearings to be 

recorded either by a stenographic 

reporter or through the use of a tape 

recorder. Since its inception in 1968, 

NASD Dispute Resolution has used tape 

recorders to fulfill this obligation. 

In response to constituent suggestions 

that NASD consider upgrading its 

recording technology, NASD intends to 

formally evaluate the digital recording 

of its arbitration hearings.6 The 

evaluation will help to ascertain how 

well arbitrators adapt to using digital 

recording equipment, the quality of the 

recordings, the appropriate file storage 

format(s), and the best means for 

disseminating and storing audio files. 

Since Rule 10326 currently does not 

allow for the use of digital recording 

equipment, NASD is proposing to revise 

the rule to expand the permissible 

methods of recording arbitration 

hearings to allow for the use of ‘‘digital 

or other’’ recording devices. This change 

will allow NASD to use digital 

recording technology, or another 

recording method, should such 

technology prove to be superior to the 

tape recording system that is currently 

in use. 

2. Statutory Basis 

NASD believes that the proposed rule 

change is consistent with the provisions 

of section 15A(b)(6) of the Act, 7 which 

requires, among other things, that 

NASD’s rules be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, and, in general, to 

protect investors and the public interest. 

NASD believes that the proposed rule 

change is consistent with the provision 

of the Act noted above because it will 

provide additional options for the 

recording of arbitration hearings, which 

may be better than the current 

alternatives available under the Code. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASD does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to section 

19(b)(3)(A)(iii) of the Act 8 and 

subparagraph (f)(3) of Rule 19b–4 

thereunder 9 as it is concerned solely 

with the administration of a selfregulatory organization. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act.10

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Notices 55537 

11 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78o–3(b)(6). 

2 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NASD–2006–102 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NASD–2006–102. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room. Copies of such filing also will be 

available for inspection and copying at 

the principal office of NASD. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–NASD–2006–102 and 

should be submitted on or before 

October 13, 2006. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.11

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 06–8001 Filed 9–21–06; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–54319A; File No. SR–

NASD–2006–060] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Notice of Filing of 

Proposed Rule Change To Require 

Members To File Regulatory Notices 

With NASD Electronically 

September 18, 2006. 

Correction: 

In FR Document No. E6–13812, 

beginning on page 48959 for Tuesday 

August 22, 2006, the first sentence 

under ‘‘Statutory Basis’’ in column 1 

should read as follows: 

NASD believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,1 which 

requires, among other things, that NASD 

rules must be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, and, in general, to 

protect investors and the public interest, 

in that the proposed rule change will 

permit the expeditious filing of 

specified required regulatory notices 

and other required submissions by 

requiring firms to file such reports and 

documents with NASD electronically. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.2

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 06–8040 Filed 9–21–06; 8:45 am] 

BILLING CODE 8010–01–M 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–54466; File No. SR–

NYSEArca–2006–48] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change To Amend NYSE Arca 

Equities, Inc.’s Clearly Erroneous 

Executions Rule To Include an Appeal 

Fee for the Archipelago Exchange 

September 18, 2006. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on August 

11, 2006, NYSE Arca, Inc. (‘‘NYSE 

Arca’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by NYSE Arca. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NYSE Arca proposes to amend NYSE 

Arca Equities Rule 7.10 governing 

clearly erroneous executions (‘‘CEE’’) on 

the Archipelago Exchange, the equities 

trading facility of NYSE Arca Equities, 

Inc. (‘‘NYSE Arca Equities’’). 

Specifically, the Exchange proposes to 

assess a fee associated with the 

appellate mechanism of NYSE Arca 

Equities Rule 7.10. 

The text of the proposed rule change 

is available on NYSE Arca’s Web site 

(http://www.nysearca.com), at NYSE 

Arca’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NYSE Arca included statements 

concerning the purpose of, and basis for, 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. NYSE 

Arca has prepared summaries, set forth 

in Sections A, B, and C below, of the 

most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange amended NYSE Arca 

Equities Rule 7.10 (Clearly Erroneous 

Executions) to include subsections 

(c)(2)–(4), which amendment became 

effective May 16, 2005. NYSE Arca 

Equities Rules 7.10(c)(2)–(4) provide for 

an appeals panel that includes the 

Exchange’s Chief Regulatory Officer 

(‘‘CRO’’), or a designee of the CRO, and 

two representatives from Equity Trading 

Permit (‘‘ETP’’) Holders (together with 

the CRO, the ‘‘CEE Panel’’) to review the 

determination of clearly erroneous 

executions that are made by an NYSE 

Arca Equities officer under NYSE Arca 

Equities Rule 7.10(c)(1). 

As part of its continuing efforts to 

enhance the appeal process, the 

Exchange proposes to add NYSE Arca 


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